Several states roll out grants and loans to help homeowners build backyard ADUs
Colorado, Hawaii, Massachusetts, New York, Vermont and California have introduced or continued financial programs to assist homeowners with accessory dwelling unit construction.
Across the United States, a patchwork of state and local initiatives aims to lower the cost barrier for accessory dwelling units. In Colorado, the Department of Local Affairs and the Colorado Housing and Finance Authority have allocated $5 million for jurisdictional support and $8 million for homeowner-direct loans, with applications accepted through October 23. Hawaii’s Maui County offers the ʻOhana Assistance program with grants up to $100,000, while Kaua'i waives development fees that can total about $20,000 for affordable units.
Massachusetts’ ADU Incentive Program, launched in July 2026, reimburses up to $500 for professional feasibility studies to guide owners. New York’s Homes and Community Renewal continues to distribute funds from its $85 million housing plan to municipalities, supporting over 565 ADUs. Vermont’s Housing Improvement Program, administered by five regional organizations, can provide grants of up to $50,000, subject to matching requirements. California’s earlier $100 million ADU grant program has run out of money and is no longer accepting applications.
Why it matters
State aid can make backyard housing more affordable, expanding housing options for low- and moderate-income families.
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